Global sales of art and antiques succumbed to economic and geopolitical realities last year, falling 4 percent to an estimated US$65 billion, the annual art market report from Art Basel and UBS said on Wednesday.
Although the market has tumbled as interest rates and inflation have risen and conflicts around the world have flared, the total – which includes sales at auction houses, galleries and art fairs – is relatively stable given the headwinds it faces the market faces, remaining slightly higher than before – a pandemic level of US$ 64.4 billion in 2019.
A 4% increase in transaction volume due to sales of lower-priced properties, however, provided some buoyancy to the market, according to the report.
This is a stark contrast to the previous two years, when the market – especially at the major auction houses – was driven by high-priced works. The number of auction lots selling for more than US$10 million fell by 25% in 2023, while houses experienced “low, positive growth” for lots priced below US$50,000.
At the same time, sales at the biggest dealers and galleries – those reporting a turnover of at least US$10 million a year – fell by 7% on average in value, the report said.
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Despite the headwinds, “collectors are still very eager to spend and engage with the market,” Clare McAndrew, founder of Art Economics Ireland and author of the report, said in a taped conversation about the research. “We’re seeing maybe a little more thoughtful and cautious approach to some of their acquisitions.” Some of them [are] maybe not taking as many risks, which is understandable, but [they are] still very active in supporting the market.”
In the US, sales fell 10% from the previous year to US$27.2 billion, although the market remains the leading center for the global art trade. China overtook the UK to take second place as sales rose 9% to US$12.2 billion, driven by first-half auction sales that were held back during strict pandemic lockdowns in 2022. China’s market slowed in the second half of the year, however, as the country’s economy stumbled.
The UK market has been hit by the decline in high-priced works, as the region is a hub for these sales. Overall sales fell 8% to US$10.9 billion last year, which was 11% below US$12.2 billion in 2019, before the pandemic.
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Last year’s market weakness was preceded by a year of uneven and modest growth, a big departure from 2021, when sales jumped 29% due to global demand emerging from the initial phase of the pandemic, according to the report. Of course, this was after a 22% freefall in 2022. The biggest amount for the market was recorded in 2014 when sales reached US$68.2 billion.
The totals presented in the report are estimates collected from auctions and dealers. Overall, global public auction sales last year fell 7% from 2022 to US$25.1 billion, while private sales rose 2% to US$3.9 billion, the report said. Meanwhile, dealer sales are estimated to have fallen 3% to nearly US$36.1 billion. Of total sales, 29% came from art fairs, down 6% from a year earlier.
While the results of public auctions are relatively easy to calculate (the report is based on figures from five data sources), dealer transactions largely are not. To estimate the sales of these private enterprises, Art Economics conducts research through an annual survey, which this year was distributed to 60 regional and national markets in December. The firm received more than 1,600 responses from a global sector it estimates includes 300,000 businesses ranging from one-man shops to multinationals. The answers probably don’t include many smaller players making lower-value sales, the report said.
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The biggest story in the dealership sector was the increase in sales volume for smaller businesses. For those with an annual turnover of less than US$500,000, sales jumped 11% last year. Still, more than half of dealers with annual sales of $10 million or more are optimistic about next year, with only 8 percent expecting sales to decline, the report said.
Inflation took a toll on dealers’ rent and salary costs last year, eating into profits as sales slumped. According to the survey results, 40% of businesses said their profitability declined last year, up 8% from a year earlier, while 29% said they were more profitable, down 10% from a year ago. -early.
